Sarabjit Singh KC, instructed by Eversheds Sutherland, successfully acted for the taxpayer against HMRC in the recent judicial review tax case of Hotelbeds UK Limited v Commissioners for HMRC [2025].
The basic facts were that HMRC refused to repay the taxpayer’s claims for millions of pounds of input tax because the taxpayer, through no fault of its own, could not get VAT invoices from its suppliers. HMRC refused to repay the claims even though they never disputed that the supplies were genuine or that the substantive conditions for entitlement to deduct input tax were met, and had repaid earlier claims made on exactly the same basis.
In response to HMRC’s refusal, the taxpayer judicially reviewed HMRC on grounds including failure to follow their policy on alternative evidence, breach of legitimate expectation and irrationality. Mrs Justice Foster allowed the claim, finding that the ‘only lawful decision’ on the facts of the case was for HMRC to repay the taxpayer. Moreover, she found that HMRC were, in her words, ‘grasping at straws’ in refusing the claims, in that they were looking for reasons to refuse when none were really available.
The decision represents a great victory for the taxpayer, and is a good illustration of the effectiveness of judicial review against HMRC in tax cases. It can be read in full here.
